Texas coast second home market will benefit from rentals

The second home market has started rebounding strongly, especially in states that saw the greatest volume of U.S. sales and that experienced the biggest downturn, according to a new report by Fannie Mae. The three Sun Belt states — Florida, California and Arizona — have rebounded in popularity among second home buyers, accounting for 34 percent of the second home mortgages originated in 2013.

Although the Texas coast doesn’t have the volume of sales that those other states do, demand for second home mortgages is strong here too and demand for rental properties is skyrocketing. Demand for Texas beach home rentals is a strong driver for sales because realtors cannot really sell on the potential for price appreciation similar to the Florida, California and Arizona markets. But realtors can make a strong argument that Texas beach homes can usually pay for themselves in rental income during the spring break and summer seasons.